The mounting signs of an economic slowdown in China may be on the minds of retail executives everywhere, but the country still has significant momentum. So much so, in fact, that it is on track in 2019 to top the U.S. as the number one retail market in the world.
According to eMarketer’s annual worldwide retail and e-commerce forecast for 2019, China’s total retail sales will reach $5.64 trillion this year, a 7.5 percent increase over 2018. Retail sales in the U.S., meanwhile, will grow 3.3 percent to reach $5.53 trillion.
Even with China’s economic growth slowing to its lowest pace in 30 years, the country’s population is still nearly four times larger than that of the U.S., and its GDP is accelerating at triple the rate. Chinese president Xi Jinping has also made no secret of his to overtake the U.S. as the leading global economic superpower, though his tactics have helped spur a trade war with President Donald Trump.
“In recent years, consumers in China have experienced rising incomes, catapulting millions into the new middle class,” said Monica Peart, senior forecasting director at eMarketer. “The result has been a marked rise in purchasing power and average spending per person.”
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This past November (2018), Chinese e-commerce behemoth Alibaba Group set a new record on its annual Singles’ Day shopping event, generating RMB213.5 billion (more than US$30 billion) in sales. Online shopping accounts for 35.3 percent of China’s retail sales, according to eMarketer, by far the highest rate in the world. (By comparison, 10.9 percent of U.S. retail sales are set to take place online this year.)
While world leaders are planning to begin negotiations regarding e-commerce standards later this week, China’s conflict with the U.S. and the demands of its Communist regime may stand in the way of its participation.